Haemonetics Corporation (NYSE:HAE) announced plans to eliminate 350 positions from its global workforce. The 11% total workforce reduction is just the latest in the blood management company’s restructuring efforts.
As part of its second-quarter financial results, the Braintree, Massachusetts-based company announced its “Complexity Reduction Initiative” to study cost-cutting measures that are part of the company’s multi-year, multi-phase turnaround.
In the second quarter, the company announced that revenue inched up 2.3% year-over-year to $225.4 million. Net income climbed 1.4% to $0.38 per share.
Commenting on the results, company CEO Chris Simon, stated, “We are launching a comprehensive Complexity Reduction Initiative to further improve our productivity and allow us to intensify the investments we are making to fuel our growth.”
The company’s strategic restructuring plan is expected to be completed over the next 30 months and save the company $80.0 million per year by the end of fiscal 2020. The company will incur one-time restructuring charges of $50 million to $60 million.
Savings from the program are expected to come from cost reductions; the rest, from headcount–some voluntary, some not.
For the time being, employees at Haemonetics will need to hold their breath. The company did not say where the job cuts will be coming from, but did say it is excluding some jobs it identifies as being critical in direct selling and clinical support, employees involved in critical, time-sensitive projects, and hourly plant workers.
In an effort to reassure investors, but not necessarily employees, Simon added that, “These are purposeful actions to streamline the way we work and enable us to better serve our customers, pursue our growth priorities and create an engaging and results-driven culture.”
Haemonetics has been restructuring and repositioning its company for a number of years now, and it hasn’t been an easy period for employees. In 2010, Haemonetics eliminated 170 jobs and closed its facility in Phoenix and Chicago.
Over the last three years, the company’s headcount has fallen by almost 18%, from 3,782 in 2014 to 3,107 in April. In 2014, two years after the company acquired Pall Corporation’s (NYSE:PLL) transfusion medicine business for $550.0 million, it laid off 320 employees and relocated its equipment manufacturing facility from Baintree to a contract facility in Mexico.
“2nd Quarter FY18 Earnings Release,” Haemonetics Corporation, November 7, 2017.
“Haemonetics Signs Definitive Agreement to Acquire Pall Corporation’s Blood Collection, Filtration and Processing Product Lines For $551 Million,” Haemonetics Corporation, April 29, 2012.
“Haemonetics Reports 4th Quarter Fiscal 2013 Revenue Up 34% and Adjusted EPS of $0.48; Fourth Quarter and Full Year Organic Revenue Up 4% and Full Year Adjusted EPS of $1.71; Completes Hemerus Medical, LLC Acquisition and Provides Fiscal 2014 Guidance,” Haemonetics Corporation, May 1, 2013.